Spanked (again) by the CBO

In his most recent speech on the topic, President Obama once again claimed the debate was settled – and for once we’re not talking about global climate change. This time the subject was hiking the minimum wage, and the President was as certain about its settled, salutary effects.

“The opponents of the minimum wage have been using the same arguments for years, and time and again they’ve been proven wrong,” Obama said last week while signing an executive order raising the minimum wage to $10.10 for government contractors. “Raising the minimum wage is good for business, and it’s good for workers, and it’s good for the economy.”

Well. The nonpartisan® Congressional Budget Office, the same bunch of economists who recently tossed cold water on supporters’ claims that the Affordable Care Act’s is a job-creator (To refresh: Actually, it encourages people to work less), says the President is wrong, wrong, wrong again.

Instead of making things better for the working poor, any boost in the minimum wage will make things – wait for it – measurably worse.

“The 40 percent minimum wage hike touted by President Obama and congressional Democrats would cut 500,000 jobs and could leave as many as 1 million people unemployed, according to the Congressional Budget Office.

“ ‘The $10.10 option would reduce total employment by about 500,000 workers,’ the CBO said. ‘As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers.’ ”

Not that the CBO is telling even those even modestly literate in economics anything they didn’t already know. Or, as the Beacon says, “The report, released Tuesday, confirms the suspicions of many wage hike opponents, who have argued that higher labor costs for entry level work would lead employers to hire fewer people.”

Can I get a “Duh”?

The report further notes that by making entry-level jobs tougher for the unskilled and less-educated to land – in other words, those who make up the largest portion of America’s poor), 80 percent of the new money would be funneled into middle- and upper-class families: Teens of well-off families working to keep their cars gassed up and insured. (A new entitlement for the upper-enders! No wonder there’s widespread support.)

The Beacon quotes Michael Saltsman, research director at the Employment Policies Institute, who says the CBO demonstrates Obama is clearly on the wrong side of this settled debate.

“ ‘The CBO has confirmed what the vast majority of careful, peer-reviewed economic research has also shown: Raising the minimum wage will reduce job opportunities for the least-skilled employees, at a time when unemployment for young adults has been above 20 percent for more than five years,’ he said.”

Heck, the White House doesn’t even agree with the President.

“The CBO report comes one week after the White House released data that contradicted Obama’s arguments in favor of raising the wage. A White House presentation found that the majority of minimum wage earners are not impoverished breadwinners supporting families. Three in four minimum wage workers are childless and many of those workers are teenagers.”

Moreover, reports the Beacon:

“While the impoverished will not enjoy a large share of the higher earnings, they will bare the brunt of increased unemployment, according to Saltsman. Those living in poverty are less educated and do not have the skills or job experience that higher income households have, making it even harder for them to get jobs amid higher labor costs.”

Other than all that, hiking the minimum wage – to clarify, finally: forcing employers to pay more for an hour’s work than it’s worth – is a terrific idea.